What happens when you combine two words with very broad meanings into one new term? You end up with a new term that has an even broader meaning! Such is the case with “customer experience.”

As a collective group, customers can only be defined with the broadest terms. “Experience” also has a wide variety of definitions, and whether someone’s experience is good or bad is based on how they define it.

When businesses discover they’re losing customers (or sales or subscriptions) because a competitor offers a better customer experience, many questions follow. Which customers are they losing? Which experiences are they unhappy with? Which interactions are they using to gauge their overall experience?

These are tough questions to answer. But when your business is on the line, actionable answers are a necessity. Companies are increasingly looking into customer experience software as the only tool that can provide those answers. In this Buyer’s Guide, we’ll help you understand:

What Is Customer Experience?

Research and advisory firm Gartner defines customer experience as "the customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier's employees, systems, channels or products."

This definition is a good starting place. But what you need is information to help you develop an actionable strategy for improving your customer experience.

Every consumer has their own mix of needs, preferences, expectations and levels of tolerance. We reward businesses that best match our own personal mix with continued patronage. Businesses that can’t achieve the right combination lose customers to the businesses that do. It’s a high-stakes game with many moving parts.

Now imagine trying to improve the business strategy of a car dealership. Your market research has revealed three broad types of car buyer:

Customer A needs a new car and would prefer to buy it from a local dealership, but also expects better service and has a very low tolerance for inattentive salespeople.

Customer B needs a new car but has no preference for local versus national or online dealerships. This customer expects online prices to be cheaper, but will not tolerate a poor online shopping experience.

Customer C doesn’t need a new car, but would prefer to buy one before their trade-in car loses much value. This customer expects a certain trade-in value for their old car, but will tolerate lower offers when offset by additional services.

Can you design a new strategy that caters equally well to each of the above buyers? That’s a tall order. Traditionally, very few companies have had the means to understand the needs, preferences, expectations and tolerances of each individual customer. Instead they’ve designed their customer interactions (both on- and offline) to appeal to the greatest number of customer types.

This type of customer experience strategy lumps all customers (or groups of them) together. Customers A, B and C all get the same experience, whether they like it or not.

What Is Customer Experience Management Software?

Customer experience (CX) management software can be thought of as the next stage in the evolution of customer service software. It can and often does include service applications that work on the frontlines of the business, such as live chat, and tools for self-service knowledge bases. But CX management solutions are really intended to play a more supervisory role, helping large companies connect the web of inter-departmental roles that improve or detract from individual customer experiences.

CX management software is a selection of applications that help identify the needs, preferences, expectations and tolerances of each customer on an individual basis. It is probably the only software tool that can distinguish discrete individuals from your amorphous and generic group of “customers.” These customers are defined by their own individualized needs, preferences, expectations and tolerances. In other words, they define your customers as they want to be treated: as individuals.

Common Functions of Customer Experience Software

CX management software typically offers the following functionality:

Survey tools

The most direct way of asking customers about the quality of their individual and collective experiences. Net Promoter surveys, for example, are used to gauge a customer’s overall willingness to recommend the company to others.

Channel monitoring

A broad group of applications designed to monitor the performance of a company’s contact channels. There are tools for specific channels as well as tools to monitor multi- and omni-channel contact centers.

Social monitoring

Monitor, manage and improve interactions with customer on social media, either by integrating their management with a customer service platform or by directing them to the appropriate department.

Text analytics

Extract meaningful CX data from text-based interactions. These tools rely on features such as natural language processing and sentiment analysis to automatically quantify and categorize written communications.

Speech analytics

Serving a similar function, speech analytics applications are applied to phone (or video) conversations. They can, for example, identify the emotional states of customers while speaking to an employee over the phone.

Online analytics

Provide insight into the online component of CX. Since customers frequently go online to learn about a company’s product or services, the performance and availability of online resources can be a large factor in shaping CX.

What Type of Buyer Are You?

Different companies have different approaches to CX management. One of the most significant factors affecting a company’s strategy is its size and organizational structure.

Large enterprises with many departments are ideal candidates for the most robust and full-featured CX management platforms. Enterprises—think large financial institutions and multinational corporations—have unique CX challenges, due in part to the complexity of their internal organization. Their CX improvement initiatives can require changing the company culture. CX management platforms can facilitate and monitor these changes, even across multiple departments or within offices around the world.

Midsize corporations can usually get by with less comprehensive CX management tools, so long as they can clearly identify all business units that impact CX. Many midsize companies are finding that a certain degree of cross-department cooperation is needed to support an improved CX. Management tools that monitor interactions by sales, marketing and service departments can quickly identify internal inefficiencies that lead to a poor CX.

Small companies rarely need the comprehensive CX management suites used by enterprises. Instead, they often opt for channel-specific or function-specific applications. They might, for example, choose a text analytics tool to monitor their live chat and email interactions. Alternatively, they might choose a single survey tool to gather opinions from their customers on the phone, in follow-up emails or when browsing a self-service page online.